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Irma Survivors Direct Wrath at Charter/Spectrum for Non-Answers

Phillip Dampier September 18, 2017 Charter Spectrum, Consumer News, HissyFitWatch 3 Comments

The Orlando Sentinel got more than it asked for when it requested readers share their experiences with utility service outages in the wake of Hurricane Irma, which pounded Florida last week.

Readers reserved the most wrath for Charter Communications, which has evidently been less than forthcoming about service restoration.

“Give me something other than ‘we depend on somebody else and we have no idea about anything.’ […] That’s not an appropriate answer,” shared one Winter Park customer.

Charter’s spokespeople have blamed most of the outages on “the massive loss of commercial power that the state suffered.”

Customers seemed to buy that explanation until early this week, days after getting their power back.

“As I read their answer, it’s basically a lot of nothing,” opined the customer. “My experience with calling them is their answer is so vague [….] They could probably be a little more reassuring explaining ‘in this area the power comes from this place, and that place has an ETA of this, therefore some days later they expect this will be online.’”

“Our power was restored in the Crown Pt. Springs subdivision in Winter Garden on Monday afternoon, which we were very thankful for,” another reader said in an email. “I sure wish I could say the same thing about our Spectrum services (cable, internet and phone). As of right now, there is still no restoration.”

Still another: “Spectrum should be able to give their customers an estimated restoration time, like the power companies have. I haven’t seen one Spectrum truck in the Winter Garden or Ocoee area … not one!!! My husband drives a tractor-trailer for Coke and has seen one on the road this week. We are sick of them blaming the power companies for the reason that they can’t get into areas.”

N.Y. Settles With Charter Communications; Rural Expansion Website Now Available

New York residents can click the image above and input their address and see if Charter’s expanded service area will include their home or business.

The New York State Public Service Commission (PSC) today announced approval of a $13 million settlement agreement with Charter Communications after the cable company failed to build-out its cable network as required in last year’s approval of Charter’s acquisition of Time Warner Cable. The $13 million settlement is the largest cable company financial settlement of its kind in state history and possibly the largest in the nation’s.

“In its approval of the merger, the Commission required Charter to undertake several types of investments and other activities,” said Commission Chair John B. Rhodes. “While Charter is delivering on many of them, it failed to expand the reach of its network to un-served and under-served customers at the pace it committed. We are taking these additional steps to ensure full and complete compliance.”

Charter Communications was required, as a condition of approval of its merger with Time Warner Cable, to expand its broadband service to 145,000 unserved/underserved homes and businesses in New York over the next four years. Rural broadband expansion was one of the conditions Stop the Cap! recommended to the New York regulator in our testimony regarding the merger proposal.

In the first year, Charter failed to meet its buildout requirements, only reaching 15,164 locations — less than half of the 36,250 it agreed to serve by May, 2017. The cable company first tried to blame utility companies for dragging their feet allowing Charter to place its cables on their utility poles, an argument that failed to impress the PSC. Even if utility companies instantly cleared the way for Charter, the cable company admitted it would not be ready to proceed because of necessary preparatory work needed to begin the buildout.

As a result, Charter has been forced to place $13 million in an escrow-type account that New York can tap into in amounts of up to $1 million increments to penalize the company for further delays. Charter can win back all $13 million if it stops missing its six-month buildout targets. Each time it does miss a deadline, the State reserves the right to withdraw funds in amounts that will vary based on the seriousness of the violation. Some forfeited funds will be used to acquire computers and internet training for low-income New Yorkers. The rest will be channeled into New York’s general fund.

Charter’s new targets require the company to expand its cable service in increments of 21,646 homes over six periods through May 18, 2020.

Many rural New Yorkers with no access to broadband service have complained Charter has not been forthcoming about whether the broadband expansion will reach their individual home or business, so the cable company has also agreed to launch a new website where New Yorkers can input their home or business address to learn if they are included in the broadband expansion. Charter warns that inclusion on the build-list database is not a guarantee that a home or area will be actually be reached.

“Build plans, timelines, and all other information provided are subject to change and areas designated for build may not be built,” the website states.

Charter is also required to deliver broadband speeds up to 100Mbps statewide by the end of 2018 — something the company has already accomplished in almost every part of the state where it provides service. The company is not subject to broadband rate regulation, and Charter charges a $199 setup fee for customers who seek to upgrade to speeds in excess of 60Mbps (except in former Time Warner Cable Maxx service areas, where 100Mbps is already the standard broadband speed). Charter must also make 300Mbps available to all New York residents by the end of 2019, something the company will likely achieve in most parts of the state sometime late next year.

Charter Communications is by far the largest cable company serving New York State. The company provides cable television, internet and telephone service in the major metropolitan areas of Buffalo, Rochester, Syracuse, Albany and the boroughs of Manhattan, Staten Island, Queens and parts of Brooklyn. Cablevision, now owned by Altice, covers the other boroughs and Long Island, as well as part of the Hudson Valley and Westchester County.

Lifeline Broadband Stalled Despite Evidence Internet Access Improves 93% of Children’s Grades

Phillip Dampier September 6, 2017 Charter Spectrum, Comcast/Xfinity, Consumer News, Public Policy & Gov't, Rural Broadband Comments Off on Lifeline Broadband Stalled Despite Evidence Internet Access Improves 93% of Children’s Grades

Comcast claims 93% of families participating in its affordable internet service for the income-challenged report an improvement in their children’s grades at school.

That result is not surprising, according to research cited by FCC Commissioner Jessica Rosenworcel, who told the New York Times last year that one-third of students from kindergarten through 12th grade who live in low-income or rural households either have no access, or cannot afford access to the internet at home.

A 2015 Pew Research report found that with approximately 29 million households in America having children between the ages of 6 and 17, five million households with school-age children do not have high-speed internet service at home. Low-income households – and especially black and Hispanic ones – make up a disproportionate share of that number:

Pew Research analysis of the Census data finds that the lowest-income households have the lowest home broadband subscription rates. Roughly one-third (31.4%) of households whose incomes fall below $50,000 and with children ages 6 to 17 do not have a high-speed internet connection at home. This low-income group makes up about 40% of all families with school-age children in the United States, according to the bureau’s American Community Survey. (The survey asked questions on home internet use for the first time in 2013.)

There are fewer studies measuring how a lack of internet access impacts on academic performance. With ongoing budget constraints now forcing seven out of 10 teachers assigning homework that requires students to set aside outdated textbooks and do research online, a significant number of students from income-disadvantaged or rural homes are struggling to keep up with their richer peers.

Concerns about fraud in the Lifeline program are stalling aggressive efforts to get affordable internet into poor and rural family homes.

In Coachella, Calif., and Huntsville, Ala., school districts report the problem has become so bad, many students are now depending on buses equipped with Wi-Fi to function as mobile study halls, where students sometimes ride for hours frantically trying to complete homework they cannot do at home. Some school buses are now parked in neighborhoods overnight with Wi-Fi service left on continuously where few families can afford a home internet connection at the prices demanded by the local phone and cable companies.

“This is what I call the homework gap, and it is the cruelest part of the digital divide,” said Rosenworcel, a Democratic member of the FCC who has tried to adapt the Lifeline program to include home internet access.

Rosenworcel and others in favor of subsidizing internet access for the poor are up against two powerful groups in Washington — the providers themselves, which have launched a PR blitz designed to promote their own voluntary low-cost internet programs like Comcast’s Internet Essentials and Charter Communications’ Spectrum Internet Assist. The other obstacle comes from a number of Republicans in Congress who frequently demagogue Lifeline as a rat hole of waste, fraud, and abuse and are reticent about expanding it to cover broadband.

In a hearing held this morning by the Senate Commerce Committee, senators questioned a representative of the Government Accountability Office that released a report in May that found “extensive problems” with the Lifeline program. The report targeted 12 phone companies for approving Lifeline applications with fake eligibility information 63% of the time, potentially exposing taxpayers to millions of dollars in losses for non-qualified or deceased applicants.

Attempts to strengthen verification procedures are ongoing, first initiated by former FCC Chairman Thomas Wheeler, who approved a national verifier system for providers to ensure compliance. But for current FCC Chairman Ajit Pai, who voted against Wheeler’s compliance program, complaining that states did a better job of combating fraud, the results of the GAO study confirmed his own skepticism about the Lifeline program. Earlier this year, he blocked the approval of nine companies from joining the program to offer affordable internet access and shows no signs of relenting.

That leaves private telecom companies to continue expanding their own affordable internet programs. Comcast recently reported it had enrolled almost 20,000 families in its program in New Jersey alone. Its Internet Essentials program offers internet access to families qualified for the National School Lunch Program for $9.95 a month and offers a modest computer for $150. Comcast’s program now in its sixth year and recently increased its offered broadband speed to 15/2Mbps and offers 40 free hours a month to XFINITY Wi-Fi hotspots.

Lexington, Ky. Residents Vent Frustration With Charter Spectrum

Nearly 200 people turned out for a packed public meeting in Lexington, Ky. to complain about Charter Communications and its Spectrum cable television service.

“Welcome, Spectrum, to the lion’s den,” said Mayor Jim Gray, introducing company representatives. The complaints began right away.

“The biggest slap in the face is that no matter what we pay,” one woman said, “no matter what we set up for autopay, every single month – no purchases, no changes on our end, our bill is never consistent and always growing.”

Prices and poor customer service were the top complaints at a meeting that filled a large room at a local senior center, organized by Lexington city officials.

The problems began after Charter Communications bought Time Warner Cable. As customers’ Time Warner Cable promotions expired, prices skyrocketed. Charter representatives are trained to convert customers to Spectrum-branded packages, which many customers argue costs more.

“There’s always going to be some pains when you change from one company to the next,” Mike Pedelty, a Charter spokesperson, told WKYT’s Garrett Wymer. “There’s different ways Time Warner Cable did things than the way Charter does things. We understand that, we appreciate that. We try to do our best to communicate to our customers, we try to make sure that we let them know their options.”

Customers do not necessarily like those options.

“Spectrum has increased my bill twice while I’m still on the package,” complained customer Loney Burns. When she tried to cut back on her package to save money, Burns was told, “if you want to take them off, we will increase your bill.”

City employee Roger Damon pointed out that most Time Warner Cable customers avoided paying the regular prices Charter uses as a benchmark to claim Spectrum’s packages and pricing costs less. By negotiating with Time Warner Cable, customers could easily obtain a new promotional offer when an old one ran out. After Charter took over, the company stopped giving back-to-back promotions. As a result, a growing number of customers are forced into regular priced Spectrum packages, exactly as Charter CEO Thomas Rutledge intended.

“It’s not a very competitive business, and that’s one of the reasons that we have these challenges with customer service today,” Gray told the crowd. “We have had very, very poor technical service, very poor customer service and price increases with no notice. No one should have to scrub their monthly bills for hidden fees.”

The city’s only recourse is to fine Charter or revoke its franchise. But with the cable industry being largely deregulated, local officials have little bite to deliver after a bark. Fines can be appealed in court and there are no significant examples in recent history where a community revoked a cable franchise and found another company willing to enter another operator’s traditional service area.

WKYT-TV in Lexington covered last week’s public meeting on Charter Communications’ service in Kentucky. (1:21)

Charter: Time Warner Cable’s Too-Low Pricing Meant It Couldn’t Afford Upgrades

Charter Communications has a new argument for raising your cable bill: Time Warner Cable’s promotions were so low-priced, the company couldn’t afford upgrades. By ending promotional pricing and raising prices, Charter can finally afford to manage the upgrades Time Warner Cable never made.

That novel argument comes courtesy of Charter Communications’ director of government affairs Anna Lucey, who made it in response to complaints from customers in western Massachusetts about substandard service and bill shock from Charter’s Spectrum. She was invited to answer questions and complaints raised during last week’s Board of Selectmen meeting in Adams, Mass.

Cheshire resident Peter Gentile, who was serving as cameraman to televise the public meeting with the cable company for Northern Berkshire Community Television, complained that when his Time Warner Cable promotion ended, Charter promptly raised his bill from $103 to $182 a month — nearly an $80 a month rate hike.

“It is absurd … I was told I could save some money by downgrading my internet so it would be slower and I would lose approximately 30 channels and my bill would only go down $7.75,” he said. “This is an impoverished community, this is an elderly community that is getting older and poorer and … I wish that you would go back to your team and explain.”

Lucey explained Charter is adopting one-size-fits-all nationwide pricing for its customers and is ending promotional pricing, explaining that Time Warner’s policy of “subsidizing” cable bills to give customers a lower rate did not allow Time Warner Cable to invest in its infrastructure.

Lucey

“It did lend a problem to infrastructure reinvestment that Time Warner could do, which is one of the reasons why we don’t have similar promotional packages that constantly deflate the cable bills,” Lucey said. “We want to keep all of our services up to date and continue to reinvest but I understand the sticker shock isn’t pleasant.”

Unfortunately for Lucey’s creative justification for rate increases, the financial facts disprove her assertion. In fact, Time Warner Cable outperformed Charter Communications in the first quarter of 2016, just before Charter closed on its acquisition of Time Warner Cable.

In April 2016, Time Warner Cable chairman and CEO Rob Marcus reported “the best ever customer relationship net additions,” “accelerated revenue growth of 7.5%,” and “robust adjusted OIBDA growth of 8.2%.”

“Our first-quarter results are the clearest indication yet that our efforts over the last 27 months are paying off. We have made our network more reliable, our products more compelling and our customer service far better. We’ve refined our marketing, enhanced our sales channels and strengthened our retention capability. All of that has driven robust customer growth, which in Q1 translated into very strong revenue and OIBDA growth. I couldn’t be prouder of what our talented, committed, passionate team has accomplished,” Marcus said, reflecting on the history of Time Warner Cable’s Maxx upgrade project, which delivered more compelling broadband speeds at a lower cost to Time Warner Cable customers than what Charter Communications offers today.

In fact, financial results for that period showed as Time Warner methodically worked through upgrading its systems, customer and revenue growth went up. The only exception was Free Cash Flow, which the company attributed to merger-related expenses, not promotional pricing:

SELECTED CONSOLIDATED FINANCIAL RESULTS
(in millions, except per share data; unaudited) 1st Quarter
Change
2016 2015 $ %
Revenue $ 6,191 $ 5,777 $ 414 7.2 %
Adjusted OIBDA(a) $ 2,159 $ 1,996 $ 163 8.2 %
Operating Income(b) $ 1,145 $ 1,084 $ 61 5.6 %
Diluted EPS(c) $ 1.72 $ 1.59 $ 0.13 8.2 %
Adjusted Diluted EPS(a) $ 1.81 $ 1.65 $ 0.16 9.7 %
Cash provided by operating activities(b) $ 1,608 $ 1,508 $ 100 6.6 %
Capital expenditures $ 1,318 $ 1,134 $ 184 16.2 %
Free Cash Flow(a)(b) $ 346 $ 407 $ (61 ) (15.0 %)
(a) Refer to Note 4 to the accompanying consolidated financial statements for definitions of Adjusted OIBDA, Adjusted Diluted EPS and Free Cash Flow and below for reconciliations.
(b) Operating Income is reduced by merger-related and restructuring costs of $40 million and $26 million for the first quarters of 2016 and 2015, respectively. Cash provided by operating activities and Free Cash Flow are reduced by merger-related and restructuring payments of $14 million and $26 million for the first quarters of 2016 and 2015, respectively.
(c) Diluted EPS represents net income per diluted common share attributable to TWC common shareholders.

Charter’s later announcement of upgrades for the remaining Time Warner Cable systems not upgraded to Maxx service before the merger deal was completed are occurring more slowly than Time Warner’s own original timetable. As soon as the ink was dry on the merger deal, Charter immediately canceled the Maxx upgrade program for all markets not already in progress with upgrades.

Charter’s own upgrade plan is less compelling than the Maxx menu of options, which gave customers more choices at a lower cost. Charter’s own financial reports admit the company is losing former Time Warner Cable customers as their promotions expire. Charter’s own executives attribute those losses not on deferred upgrades, but on the cost of service going forward after promotional pricing expires.

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